Bill Summary

The Banking Regulation (Amendment) Bill, 2017

The Banking Regulation (Amendment) Bill,
2017 was introduced in Lok Sabha by the
Minister of Finance, Mr. Arun Jaitley, on July
24, 2017. It seeks to amend the Banking
Regulation Act, 1949 to insert provisions for
handling cases related to stressed assets.
Stressed assets are loans where the borrower has
defaulted in repayment or where the loan has
been restructured (such as by changing the
repayment schedule). It will replace the Banking
Regulation (Amendment) Ordinance, 2017.
Initiating insolvency proceedings: The central
government may authorise the Reserve Bank of
India (RBI) to issue directions to banks for
initiating proceedings in case of a default in loan
repayment. These proceedings would be under
the Insolvency and Bankruptcy Code, 2016.
Issuing directions on stressed assets: The RBI
may, from time to time, issue directions to banks
for resolution of stressed assets.
Committee to advise banks: The RBI may
specify authorities or committees to advise banks
on resolution of stressed assets. The members
on such committees will be appointed or
approved by the RBI.
Applicability to State Bank of India: The Bill
inserts a provision to state that it will also be
applicable to the State Bank of India, its
subsidiaries, and Regional Rural Banks.

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Vatsal Khullar
July 24, 2017
vatsal@prsindia.org
PRS Legislative Research Institute for Policy Research Studies
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